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Seasonal price fluctuations for fresh fruit and vegetables

Fresh fruit and vegetables feature on household shopping lists throughout the year. The nutritional value of fresh fruit and vegetables is explained in the Ministry of Health’s guidelines, which recommend that we eat five or more servings of these each day.

Fresh fruit and vegetables are in the fruit and vegetables subgroup of the food price index (FPI). In the June 2008 month, expenditure weights in the FPI showed that of every $100 spent by households on food, $13.97 was on fruit and vegetables, of which $5.18 was on fruit and $8.78 on vegetables.

Fruit and vegetable imports and exports flourished from 2003 to 2009. For the year to June 2009, fruit and vegetable imports reached $753 million, compared with $482 million in 2002/03. Exports of fruit and vegetables reached $2.27 billion in 2008/09, compared with $1.63 billion in 2002/03.

 

Seasonal price movements in the fresh fruit and vegetables subgroup

Fresh fruit and vegetable prices paid by New Zealand households can exhibit seasonal patterns due to seasonal changes in temperature, weather, and availability.

Figure 1 shows how fresh fruit and vegetable prices have changed from 2004 to 2009. While there is an increasing trend, the price movements exhibit seasonal fluctuations around the trend. These fluctuations are often referred to as a sawtooth pattern, as prices show regular sharp rises and falls.

Figure 1

Figure 1, fruit and vegetable subgroup seasonally unadjusted 


Figure 1 shows that the seasonal movements for fresh fruit prices tend to be the opposite of those for fresh vegetables. During the summer months – that is December, January, and February – vegetable prices are at their cheapest while fruit prices are at their most expensive. During the winter months – June, July, and August – fruit prices are at their cheapest (after apple and kiwifruit crops have been picked) and vegetable prices are at their most expensive.

Prices for fresh fruit tend to increase rapidly during spring (September, October, and November), often peaking during the summer months, usually in January, then decreasing over autumn, when recently harvested kiwifruit and apples are available. In contrast, prices for fresh vegetables increase during autumn and winter and decrease during late spring and summer.

However, in 2008, prices for fresh vegetables peaked at a higher level than usual, due to unusually wet weather.

Individual fresh fruit and vegetables tend to have their own seasonal variation in price. A selection of fruit and vegetables from the FPI basket are discussed below.

 

Fresh fruit

Apples and bananas are popular, and account for a large proportion of spending on fruit in the FPI basket. Kiwifruit is New Zealand’s largest horticultural export. New Zealand kiwifruit exports account for approximately 30 percent of world trade in kiwifruit.

As seen in figures 2 and 3, apples and kiwifruit exhibit seasonal price variation – demonstrating the sawtooth pattern – while figure 4 shows that banana prices do not.

Figure 2 

Figure 2, Apples

Apple prices peaked at nearly $4.50 per kg in December 2008. Prices fell to about $2.25 per kg during the April and May months of autumn 2009.

Apple prices tend to be most expensive in summer, usually reaching a peak in January or December. Prices then fall and are cheapest in autumn, and become gradually more expensive throughout the rest of the year.

Figure 3

Figure 3, Kiwifruit

Kiwifruit prices have a similar seasonal price pattern to apples. However, kiwifruit prices exhibit greater seasonal variation than apple prices.

According to Turners and Growers, New Zealand kiwifruit is in short supply in late summer, and green kiwifruit is often imported for local consumption. Both green and gold kiwifruit are in plentiful supply in late autumn, winter, and spring.

The prices for kiwifruit tend to increase during spring and summer, often peaking in March months. Kiwifruit prices are usually at their cheapest in late autumn and winter. In March 2009, kiwifruit prices reached over $6.50 per kg, while prices fell below $2.00 per kg in winter 2009.

New Zealand imports bananas all year round for local consumption. Therefore prices for bananas are not influenced by New Zealand seasonal factors. Rather they are influenced by other factors such as freight and transportation costs, foreign exchange rates, overseas suppliers (and the climate conditions they face).

Compared with apples and kiwifruit, banana prices tend to be much more stable from month to month, but have generally increased over the past five years. Figure 4 shows that there was a big jump in banana prices recorded in the second half of 2006, rising from about $1.50 per kg in May to about $2.50 per kg in November 2006 (an increase of about two-thirds).

Figure 4 

Figure 4, Banana 

Fresh vegetables

When expressed in June 2008 prices, lettuce, tomatoes, and potatoes are the three most highly weighted fresh vegetables in the FPI basket, accounting for over one-third of the expenditure weight of vegetables.

Figures 5, 6, and 7 show that the price movements for lettuce, tomatoes, and potatoes exhibit seasonal patterns of price change.

Figure 5 

Figure 5, Lettuce

Lettuce is a green leafy vegetable, and the size and condition of its heads are strongly influenced by the weather.

In spring and summer, lettuce prices tend to fall sharply after peaking during the winter months, often in July, and then rising again over the autumn and winter months. Prices were as low as $2.19 per kg in January 2009 and rose to nearly $8.50 per kg in July. Prices subsequently fell to $2.60 per kg in November 2009.

In 2008, lettuce prices peaked in August – recording their highest level over the past 10 years at nearly $9.75 per kg – with growing conditions hampered by unusually wet weather.

A previous Price Index News article, Lighter lettuce leaves hole in hip pocket looks at how lettuce prices expand while their sizes shrink over the winter months.


Figure 6 

Figure 6, Tomatoes

Tomatoes also exhibit a seasonal pattern of price change, although this price pattern is not as consistent as that of lettuce.

According to Turners and Growers, New Zealand-grown tomatoes are most plentiful in summer, and are supplemented with imported tomatoes during the autumn and winter. Figure 6 shows that tomato prices fall during the spring and summer months and are cheapest in summer. Prices rise in autumn and are highest in winter and early spring. The seasonal pattern in 2008 and 2009 appears to have been influenced by export restrictions (which were put in place following the discovery of a parasite on New Zealand-grown tomatoes and capsicum in June 2008).

Compared with the large increases and decreases of lettuce and tomatoes, the seasonal pattern of potato prices is less pronounced. Over the five years to November 2009, potato prices ranged from about $0.90 per kg to about $2.00 per kg.

Potatoes are root vegetables, and their prices tend to move opposite the direction of those for lettuce and tomatoes. Potato prices tend to be at their highest during late spring and summer. They fall during autumn and rise again after winter and early spring.

Figure 7

Figure 7, potatoes

People who eat five or more servings of fruit and vegetables a day have a wide selection to choose from throughout the year. And while consumers have to contend with seasonal price increases, fortunately these tend to occur at different times of the year for different types of fruit and vegetables.

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